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Rescissions, How Do They Work?

Recent pressreports have indicated that the Trump Administration is looking to use a process known as rescission to cut spending from the recent omnibus, among other areas. The presidentially-proposed rescission process is laid out in Title X of the Congressional Budget and Impoundment Control Act of 1974 and was last used almost two decades ago. This process is different than when Congress initiates its own rescissions, often in supplemental appropriations bills that offset other spending increases.

What are rescissions?

Rescissions are a process available to the President to facilitate the cancellation of certain appropriated spending. The executive branch is legally required to spend money that Congress has appropriated, but the President may temporarily delay spending of budget authority (BA) the President views as not worthwhile, while asking Congress to consider cutting that spending. Congress can pass a rescission package with only a simple majority in the Senate – rather than the 60-vote supermajority generally needed to overcome a filibuster.

How have presidents used the executive's rescission authority in the past?

Prior to 1972, presidents impounded funds from time to time when circumstances changed enough so that the funding could not be used effectively or for the intended purpose. In 1972, President Nixon started using impoundments on a larger scale to change policy. Those impoundments were challenged in court and overturned. By 1974, Congress created the current rescission process in the Congressional Budget and Impoundment Control Act of 1974, which grants presidents a limited ability to impound funds temporarily while awaiting congressional action on formal rescission requests.

Between fiscal years 1974 and 2000, presidents proposed rescissions totaling $76 billion for every fiscal year except 1988, of which Congress accepted $25 billion. Often, these rescissions focused on cutting BA that would never be spent or was viewed as no longer necessary.

The executive's rescission authority has not been used since 2000, when President Bill Clinton was the last president to submit a formal rescission request.

What exactly is the process for consideration of rescissions?

Step 1: The President submits a special message formally asking for a rescission. The special message must specify:

How much is proposed to be rescinded.

The specific accounts where the rescinded BA comes from.

Projects and functions affected.

Why the BA should be rescinded.

The estimated fiscal, economic, and budgetary impacts of a rescission, and the impact on the programs and functions of such a rescission.

The special message starts a 45-day clock (excluding days Congress adjourns sine die or both chambers are out of session for more than three days). If Congress doesn’t act in 45 days, the President’s proposal expires and the executive branch must spend the money as prescribed.

Step 2: Congress may draft a rescission bill in response to the President's special message, and that bill is referred to the appropriate committee. For a rescission related to the FY 2018 omnibus appropriations bill, this would be the House or Senate Appropriations Committees.

Step 3: If that committee does not act on the bill after 25 days, a discharge petition for the bill is in order. The motion to discharge is privileged with a limitation on debate and is only subject to a majority vote.

Step 4: Once either chamber has a rescission bill (either via the committee process or discharge), they can act on it. In the House of Representatives, debate on the bill is limited to no more than two hours.

In the Senate, consideration of the bill is subject to a ten-hour clock for debate, which means it is not subject to the cloture requirement of 60 votes to stop debate. Indications are that the motion to proceed (which is usually a debatable motion and thus subject to cloture and the 60 votes threshold) will also be privileged and thus only require a simple majority. However, this is subject to ruling from the Senate Parliamentarian. Amendments in the Senate must be germane, and no amendment may be debated for longer than two hours.

Step 5: If the bill or its conference report passes both chambers, the budget authority is rescinded. If the bill fails, or if the 45-day clock runs out, the President must spend the money and cannot propose its rescission again.